Today, Patriot Battery Metals Inc. (TSX: PMET) (OTCQX: PMETF) announced that it had entered into a subscription agreement with Germany’s largest car manufacturer, Volkswagen, providing for the issue and sale to Volkswagen of 15,557,500 Common Shares at an price of C$4.42 per share, for aggregate gross proceeds of approximately C$69 million to be paid on closing in U.S. Dollars in the amount of US$48 million.
The Subscription Price represents a 65% and 35% premium to the 30-day and 90-day volume weighted average trading price of the Common Shares on the Toronto Stock Exchange for the period ending December 17, 2024, the last trading day prior to the announcement of the Strategic Investment.
Upon closing of the Strategic Investment, Volkswagen will own approximately 9.9% of Patriot’s issued and outstanding Common Shares on a pro forma non-diluted basis and will be granted certain rights pursuant to an investor rights agreement to be entered into between Volkswagen and the Company.
The proceeds from the Strategic Investment will be used for exploration, development and completion of a feasibility study on the Shaakichiuwaanaan Project, as well as for general and working capital purposes.
As part of the Strategic Investment, Patriot will enter into a binding offtake term sheet with Volkswagen’s wholly-owned and vertically integrated battery manufacturer, PowerCo, for Patriot to supply 100,000 tonnes of spodumene concentrate (SC 5.5 target) per year over a 10-year term.
The Offtake is expected to supply PowerCo’s cell production activities in Europe and North America, including its battery cell factory in St. Thomas, Canada. St. Thomas is intended to become PowerCo’s largest cell factory with a production capacity of up to 90 GWh, enough to produce over one million electric vehicles a year. Building a North American EV supply chain, from raw materials supply to the construction and operation of Gigafactories, is part of PowerCo’s mission.
Ken Brinsden, Patriot’s President, CEO & Managing Director, said: “We welcome Volkswagen and PowerCo as our strategic partner. This is a pivotal milestone for Patriot as we bring in a long-term strategic partner who is already a major participant in the European and North American battery supply chain as the first customer of the globally significant Shaakichiuwaanaan Project. This investment is consistent with our long-term strategy for Patriot to become a global lithium leader and a key supplier of lithium raw materials to the emerging North American and European battery materials supply chains.”
This strategic partnership and investment from Volkswagen has propelled shares of PMET up 28.68% to $3.41 in late-morning trading.
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